In the filing, Veon’s board said: “We have concluded that a material uncertainty remains related to events or conditions that may cast significant doubt on our ability to continue as a going concern, such that we may be unable to realize our assets and discharge our liabilities in the normal course of business.”
In particular, Veon warned of risks from “the ongoing conflict between Russia and Ukraine” and “its adverse impact on the economic conditions and outlook of Russia and Ukraine”, as well as “physical damage to property, infrastructure and assets”.
Veon earns 52% of its revenues from its Russian subsidiary, VimpelCom, which trades under the Beeline brand, and another 13% from Ukraine, where it operates as Kyivstar.
The filing also warned of “the effect of sanctions and export controls on Russia and counter-sanctions enacted by Russia”.
Julian Tanner, managing partner of Veon’s PR agency, Tuva Partners, complained to Capacity about the report, which was headlined “War-hit Veon warns: ‘We may not be able to continue’”, though he did not dispute any of the statements in the filing to shareholders.
He has promised that Capacity will be able to interview Kaan Terzioğlu (pictured), CEO of Veon, in the immediate future.
This is what Tuva Partners sent on behalf of Veon:
“Your recent article on Veon (May 3) refers to risk factors listed in a 20-F mandatory disclosure document that is regulated by the United States Securities and Exchange Commission (SEC). SEC rules, and in particular Item 105 of Regulation S-K, requires disclosure of material risk factors that may make an investment in the company speculative. These risks should not be read as a prediction by the company of what management actually thinks will happen, and certainly should not be read in isolation.
“Veon’s most recent performance update is set out in the 1Q22 trading update published on our website: it shows that the group’s local currency revenue rose by 9.8% YoY and local currency EBITDA increased by 5.7% YoY. Furthermore, Veon continues to maintain a solid financial position and has no significant debt maturities for the remainder of 2022. Credit rating agency Fitch has recently defined our liquidity as strong, which reflects, among other things, the group’s total cash of US$1.9 billion, of which $1.3 billion is held at the HQ level. The cash that we hold as of today is sufficient to service all our financing obligations during 2022. In addition to this robust financial position at the HQ level, Veon’s operating companies are generally self-funding. Finally, we recently communicated that our Algeria put option sale has been valued at $682 million and is expected to close in the coming months; completion of this transaction will further strengthen the group’s liquidity position.”